Saturday, March 02, 2013

Attorney represents association board, not the homeowners -

Attorney represents association board, not the homeowners -
David Bendoff is absolutely right, of course.  But it is interesting to note the way some other industry lawyers play games with this somewhat confusing relationship when they are doing the PR routine.  When some of these industry attorneys (such as the one I was on the air with on KNPR the other day--see below) are talking to the media and extolling the virtues of HOAs and condo associations they often claim that the owners ARE the association.  He used almost those exact words.

But then we descend from the clouds into the real world of association affairs and the actual relationship between the lawyer, the association, and the owners, which David Bendoff accurately and honesty describes. When an owner tries to get information from the association lawyer about anything specific, the lawyer refuses. Why?  Because he or she represents the association, which is a corporation with a separate legal existence, and not the owners. Going a step further, as David Bendoff explains, in reality representing the association means representing the board of directors, because the association is just a fictitious legal entity. The directors are the real client.  This is just the nature of corporation organization, and it is important to understand.  That's why I wish the media would stop uncritically repeating all the warm and fuzzy community/town meeting propaganda. This is a business arrangement.

Computer theft puts HOA residents' personal info in unknown hands |

Computer theft puts HOA residents' personal info in unknown hands | KISSIMMEE, Fla. —Kissimmee police said a thief now has the bank account information for thousands of people who belong to a homeowners' association.

A property management company for six communities in Osceola, Orange and Polk counties had its computer server stolen Monday, police said.
The need for data security -- a big issue in other industries that retain personal information -- also applies in Privatopia as this incident illustrates.

Thursday, February 28, 2013

California bill would ban smoking in multi-unit housing - Real Estate - The Sacramento Bee

California bill would ban smoking in multi-unit housing - Real Estate - The Sacramento Bee: Levine's bill would permit outdoor smoking near apartments or condos, but only in a clearly marked area that is at least 20 feet from any housing unit and 100 feet from a playground, school or pool.

Landlords, property managers, building owners or homeowners associations would select the outdoor smoking area. Condominium neighbors collaboratively would choose a site.

"Neighbors usually work together to figure those things out," Levine said.
If you go 'em, smoke 'em.  Outside.

Lawmaker hopes state post would keep condo disputes out of court -

Lawmaker hopes state post would keep condo disputes out of court -
Proposal from state representative Elaine Nekritz to create a condo ombudsperson in Illinois.  Here is a link to the full text of the bill.   How about this section?

17        (3) Anecdotal accounts of abuses within condominium
18    communities create continuing public demand for reform of
19    condominium property law. This results in frequent changes
20    to the law, making it more difficult to understand and
21    apply and imposing significant transitional costs on
22    condominium communities statewide. By collecting empirical
23    data on the nature and incidence of problems within
24    condominium communities, a Condominium Ombudsperson will
25    provide a sound basis for prioritizing reform efforts,
26    thereby increasing the stability of condominium property

State Supreme Court holds key to condo assessment case -

State Supreme Court holds key to condo assessment case -
This is firewalled and requires registration, but it is a good story.  Thanks for the link to Trib reporter Pam McKuen, who really knows her stuff. Illinois treats condo owners as if they were tenants for assessment collection purposes, allowing associations to evict them using the housing court that landlords use. So--isn't turnabout fair play? Shouldn't owners be allowed to use "repair and deduct" just like tenants do?  If you want a copy of the appellate court opinion that is now being appealed to the Illinois Supreme Court, send me a private email at "ecmlaw at gmail dot com".

"When Lisa Carlson stopped paying her condominium assessments nearly four years ago, she never expected that her legal battle over a leaky roof, bulging drywall and cracked ceilings would wind up before the state Supreme Court.
An appeals court paved the way, ruling that Carlson, of Highland Park, could use her condo board's alleged failure to repair the roof as a defense against its efforts to evict her.
"I stopped paying my assessments because the bottom line is that the board refused to fix the water damage," Carlson said. "To me this has become a cause. This is about more than me."
The case has captured the attention of state and national condo association organizations worried that an Illinois Supreme Court decision in Carlson's favor will make it much more difficult to collect fees from recalcitrant residents."

The case is:

SPANISH COURT TWO CONDOMINIUM ASSOCIATION, Plaintiff and Counterdefendant-Appellee and Cross-Appellant, v. LISA CARLSON, Defendant and Counterplaintiff-Appellant and Cross-Appellee.

No. 2-11-0473


2012 IL App (2d) 110473; 979 N.E.2d 891; 2012 Ill. App. LEXIS 924

June 27, 2012, Opinion Filed

Wednesday, February 27, 2013

HOA's Not a Favorite Subject of Incoming House Speaker | HOA Management | The Premier Home Homeowner Association Management Directory

HOA's Not a Favorite Subject of Incoming House Speaker | HOA Management:
"Incoming Speaker of the House Mark Ferrandino brings a very personal perspective� on homeowners associations to the Colorado General Assembly when it convenes� next week.
He’s not a fan."
As time goes by more and more legislators will have personal experience with HOAs and condo associations, and the hyper-technical, smoke-and-mirrors, leave-it-to-the-industry approach that prevails today will likely change in favor of broader discussions. At least, I hope so.

Tuesday, February 26, 2013

Las Vegas HOA corruption probe continues

"Federal prosecutors have charged nearly 40 conspirators in the scheme to take over Las Vegas Valley homeowners associations. But more than four years after the investigation became public, they still haven't revealed the full extent of the massive scheme. New details likely will surface as prosecutors prepare for the next phase of the long-running investigation: the trial of Leon Benzer, accused of being the "architect" of the corruption scheme, and 10 other defendants indicted with him in January."
I was on Nevada Public Radio the other day with the state ombudsperson, an HOA lawyer, and an owner advocate.  It was a good conversation.  But there was something that kept going through my mind that I never got a chance to say, so here it is.

Nevada is one of the few states that has any state-level oversight of HOAs and condos.  They have the ombudsperson and a state commission, and they have a pretty comprehensive statutory scheme that was the result of also having a legislator, state Senator Mike Schneider, who knows a lot about this issue area and cares about it. Compared with the almost-total absence of oversight that is the norm in nearly all other states, Nevada is at the forefront of regulation of CIDs.  I mean, in nearly every other state, if you report something like this, there is nowhere to turn except the courts.  Every state and local government official will just tell you to go file a civil suit, which few people can afford to do.  And if somebody does that, after 7 years of litigation and $100,000 in legal fees they will have...what?  Maybe a declaratory judgment?  Maybe small damages, and an appeal by the association? Maybe a big fat goose egg? It is unpredictable.  And everybody in the neighborhood will hate you for making them pay the association's attorney fees. Private litigation may be necessary and can be effective in some cases, but clearly it can't be the only answer.

But in Nevada, there are other avenues.  However, despite all that Nevada has put in place, the biggest HOA corruption ring ever discovered in the United States was running a gigantic, multi-million dollar fraud operation involving at least 11 associations. They took over these associations and turned them into ATMs, using association funds to pay themselves and shake down developers and insurance companies. And it was the US Attorney's office and the FBI, not state officials, that brought down this empire of corruption.

So, I have to ask myself what the prospects are for effective regulation of CIDs, if something of this magnitude can happen right under the noses of state officials whose job it was to provide oversight. I am not blaming or even criticizing these officials. As the attorney on the KNPR radio show said, maybe there is no way (under the current laws) to prevent something like this from happening.  That is a scary thought.

And if that is true, as it may well be, I am saying that maybe we need to take a much more comprehensive look at what would really need to be put in place, if we were to take seriously the job of protecting CID unit owners and others against inappropriate, illegal, and even felonious actions of CID boards and their professionals.  If an oversight commission, an ombudsperson, and a detailed statutory scheme are inadequate to prevent multi-million dollar takeovers and ripoffs, what is needed?  Or are our state legislatures content to allow these predations to continue?

Maybe the time has come for federal congressional hearings. Maybe we need national legislation mandating much more public disclosure, transparency, and accountability from developers, local governments, CIDs, and the professionals who profit from their proliferation. Maybe more.

I would be interested in hearing what readers have to say.  However, I will say at the outset that those who keep saying they want to "abolish HOAs" need to understand that it isn't that simple, and they need to educate themselves about why this institution has spread so fast. Local governments and developers are very dependent on this form of housing, and that isn't going to change anytime soon. So...what is to be done?

Sunday, February 24, 2013

NY Supreme Court sides with homeowners association in records dispute | Riverhead News Review

Supreme Court sides with homeowners association in records dispute | Riverhead News Review
Before going to court last year, the trio asked to see financial records of the Windcrest East Homeowners Association, a request that was granted provided the homeowners drove to Queens to see the records in person. After they could not settle the matter with the association, the homeowners filed the petition against its board of directors, saying the board violated state property law and community bylaws by storing the financial records away from their complex on Golden Spruce Drive in Calverton.

But Justice William Rebolini issued a judgment Jan. 24 in favor of the association, sayings laws were not violated and that the trip to Queens was not an undue inconvenience.

McKenzie and others talk about HOAs on KNPR

In case you want to hear me and three other people talking about HOA's in Nevada, here is the link to the KNPR (Nevada Public Radio) show from Thursday, 2/21/13.